Part 1 - 2

Identify the Company's Market Structure

Our company's market is structured like an oligopoly.

3 Examples That Support Our Answer Including Real-Life Competitors

• Music and Arts and Attina's are the only other dominant competitors
• Most other competitors for music lessons are small businesses from home
• Some schools offer lessons from band, chorus, or orchestra teachers, but those are also on a small scale. Harmonic Studios is a much larger company.

We Have Two Advantages and Two Disadvantages of This Market Structure

• Advantages
  • There are only a few other dominant competitors, so the market is less competitive
  • We will have some control over our prices (more so than pure competition or monopolistic competition)
• Disadvantages
  • It is difficult to enter this market structure
  • The control over our prices would be interdependent with our competition (ex: if Music and Arts lowered their prices for their instruments, we might have to lower our prices as well)

We Have Explained How the Market Structure Affects the Company's Pricing and Advertising

• The control over prices in an oligopoly is interdependent with the competition. In other words, the prices of lessons/instruments from Music & Arts or Attina's would affect our prices as well, since people tend to go to the store with lower prices. Furthermore, advertising would be a fairly important role in our business in order to compete with the other dominant businesses.